Pinduoduo Inc. ($PDD) Earnings (Q4 FY21)

 Pinduoduo Inc. ($PDD) Earnings and Opinion:


Pinduoduo Inc. ($PDD) is a company in the Consumer Cyclical sector and operates in the Internet Retail industry. The company operates an e-commerce platform in China. Pinduoduo was incorporated in 2015 and is currently headquartered in Shanghai, China. The company first started trading on the stock market in 2018.

Pinduoduo Inc. EPS and Revenue (Q4 FY21):

  • EPS of $0.92 beating expectations of $0.20
  • Revenue of $4.27B missing expectations of $4.51B
Pinduoduo Inc. EPS and Revenue (FY21):
  • EPS of $1.50 beating expectations of $0.69
  • Revenues of $14.74B missing expectations of $15.53B
Pinduoduo Inc. FY21 Highlights:
  • Total revenues increased 58% (YOY)
  • Revenue saw major growth from transaction services (144% YOY)
  • Cost of revenues jumped up 65% (YOY)
  • Research and development costs increased by 30% (YOY)
Opinion:
China is a place to stay out of right now, when it comes to investing. This company resides in China and has had a shaky past year with all of the tensions and regulation swarming China's economy. Pinduoduo beat its expectations for EPS, but missed expectations for Revenues. Revenues showed increases over the past year, but it was overshadowed by the increasing costs of collecting those revenues. Increases in cost of revenues were due to higher payment processing fees, increased fulfillment fees, and merchant support services. Personally, I have no interest and will continue to not have interest in this company. China is a place to stay out of right now as an investor. They have seen a huge decline in their economy since the pandemic. I like the business model of this company, and it continues to grow its revenues year-over-year. However, that doesn't make up for the fact that it sits in the shadows of Alibaba (big e-commerce company in China). It is going to have to make some big moves and start growing its revenues and slowly cut costs while doing so, to be able to attract investors. With this company way off of all-time highs, if you really like this company, this may be a solid opportunity to buy in. In my opinion, I think you can find some e-commerce giants in the United States that will generate you better returns.

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